KLONDEX MINES LTD. T.KDX

Comments on Q2 Numbers

[JRafflesUK]

My take on the numbers produced include the following:-

• Hollister – 7,069 ounces Q2 v 2,051 ounces Q1 (9,120-7,069).  This is a 244% increase, which illustrates that there is a powerful rate of growth leading to Q3 and Q4.
• True North – 6,333 ounces Q2 v 3,916 ounces Q1 (10,249-6,333).  This is a 64% increase, which illustrates, again, that there is a powerful rate of growth leading to Q3 and Q4.
• TN Tailings – 1,113 ounces in Q2 v nil in Q1. This should add earnings to the bottom line in Q2 v Q1.

		Three months ended June 30, 2017											Six months ended June 30, 2017
Nevada		Fire Creek			Midas			Hollister			Nevada Total		Fire Creek			Midas			Hollister			Nevada Total
Ore tons mined		33,929			40,433			15,162			89,524		65,659			80,586			22,500			168,745
Gold equivalent grade mined (opt)(1)		0.78			0.33			0.47			0.52		0.97			0.34			0.40			0.60
Gold equivalent ounces mined(1)		26,331			13,534			7,069			46,934		63,919			27,510			9,120			100,533
Ore tons milled		49,060			43,172			-			92,232		70,719			82,479			-			153,198
Gold equivalent grade milled (opt)(1)		1.01			0.36			-			0.71		0.99			0.34			-			0.64
Average gold recovery rate (%)		92.3	%		92.4	%		-	%		92.3	%	92.6	%		92.2	%		-	%		92.5	%
Average silver recovery rate (%)		85.5	%		83.3	%		-	%		83.5	%	84.8	%		83.7	%		-	%		83.8	%
Gold equivalent ounces produced(1)		45,773			13,962			-			59,735		64,966			25,366			-			90,319
Gold equivalent ounces sold(1)		47,370			15,338			-			62,708		63,906			28,061			-			91,950
GEO Ratio(1)		72.5			72.5			72.5			72.5		72.0			71.1			71.3			71.3
(1) Gold equivalent ounces ("GEO") and grades are computed as the applicable gold ounces/grade plus the silver ounces/grade divided by a GEO ratio. GEO ratios are computed by dividing the average realized gold price per ounce by the average realized silver price per ounce received by the Company in the respective period. Preliminary GEO ratios are listed above:

 

		Three months ended June 30, 2017									Six months ended June 30, 2017
Canada		True North Mine			True North Tailings			Canada Total			True North Mine			True North Tailings			Canada Total
Ore tons mined		44,896			-			44,896			73,582			-			73,582
Gold equivalent grade mined (opt)(1)		0.14			-			0.14			0.14			-			0.14
Gold equivalent ounces mined(1)		6,333			-			6,333			10,249			-			10,249
Ore tons milled		44,484			25,191			69,675			73,421			25,191			98,612
Gold equivalent grade milled (opt)(1)		0.14			0.05			0.11			0.14			0.05			0.12
Average gold recovery rate (%)		93.0	%		89.0	%		92.0	%		94.0	%		89.0	%		94.0	%
Gold equivalent ounces produced(1)		5,798			1,113			6,911			9,598			1,113			10,711
Gold equivalent ounces sold(1)		5,732			1,100			6,832			10,146			1,100			11,246
GEO Ratio(1)		70.8			70.8			70.8			70.8			70.8			70.8
(1) Gold equivalent ounces ("GEO") and grades are computed as the applicable gold ounces/grade plus the silver ounces/grade divided by a GEO ratio. GEO ratios are computed by dividing the average realized gold price per ounce by the average realized silver price per ounce received by the Company in the respective period. Preliminary GEO ratios are listed above:

[passionatepiper]

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[Cashcosts]

While they are bringing new ounces into production, the grades at True North are most likely unprofitable ounces well below the average grade at the mine.  I calculated 4.7g/t was closer to 7-8 for what we really want to be mining.  Add that to an underutilized mill and the costs are going to be high.  This may change as it ramps up.  The tailings also will not add to earnings,

[passionatepiper]

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[Syntaxx]

Piper - wouldn't you say this is an example of the company 'learning its lesson' and putting out a good press release? I tend to agree with you, many other previous press releases were pretty bleak, poorly timed, and lacking positive information. I still scratch my head at the previous one when the stock was finally starting to move again. This was a good release at a good time

[passionatepiper]

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[Cashcosts]

This is because the grade is low but the rock is easy to process.  The potential for Hatter Graben is easy to process rock with bonanza grades.

[passionatepiper]

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